The Case for the U.S. Patent and Trademark Office’s Adoption of an Open-Source “Bounty” System for Reviewing Buisness Method and Software Patents, in Light of the Patent Infringement Battles Featuring the U.S. Financial Exchanges that Have Been Waged in Recent Years

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In recent years, numerous patent industry experts and members of the public have been clamoring for reforms in the U.S. Patent and Trademark Office’s (“PTO’s”) patent examination procedures – particularly in the wake of the near shutdown of the BlackBerry wireless email messaging system in 2006, due to a rival’s questionable but successful patent infringement suit. In some of these widely publicized cases, including the BlackBerry case, prior art that could have invalidated the controversial patents at the core of the infringement suits was available in the public domain. However, the PTO failed to locate the critical prior art before issuing these patents. As a result, private companies had to expend enormous sums of money in litigation costs, and ultimately in settling the suits against them. Looking forward, to prevent patents that are not novel or otherwise not deserving of monopolistic protection from being wielded in future infringement suits, this Note supports the implementation of a new patent post-grant review system that would enable members of the public to more meaningfully challenge the validity of patents after they are issued. However, this Note further contends that the public should be empowered and more greatly incentivized to challenge the validity of patents in the time period before they are issued as well. It therefore contends that the PTO should fully embrace the open-source paradigm by adopting a “bounty” system that would reward members of the public who successfully assist it in locating prior art that can invalidate pending patents (with a particular emphasis on business method and software patents.) This Note examines both of these proposals in light of the patent infringement suits that have been launched against some of the world’s largest financial exchanges. Of note, the global financial exchanges have recently caught the public’s attention in an unprecedented manner – owing to their merger activity and an explosion in the trading products and technologies that they have been offering. As a result, they may be ripe targets for patent infringement suits in the near future. The proposals in this Note, if implemented, might help to prevent questionable patent infringement suits from being launched against them in the coming years.

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